The federal government has been called upon to make good it’s pronouncement on subsidy removal from premium motor spirit (PMS) otherwise called petrol with a law by the National Assembly.
A petroleum downstream expert, Ronke Onadeko, who made the call on Tuesday while speaking at an media training programmes orginazed by Facility for Oil Sector Transformation (FOSTER), said enacting a law that gives legal backing to such pronouncement will assure investors of its commitment to deregulation of the downstream sector of the oil and gas industry.
She noted that such regulation will give credence and clarity to the recent statement by the group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari that the corporation will henceforth no longer subsidies the price of the commodity.
Mallam Kyari had on Monday last week while on an African International Television (AIT) morning programme: MoneylinewithNancy, in Abuja, said the will no longer support the payment of subsidy on petrol.
Responding to a question on whether or not the government was still paying subsidy on petrol, Kyari said, “There is no subsidy and it is zero forever, adding that going forward there would be no resort to either subsidy or under recovery of any nature. NNPC will play in the marketplace, it will just be another marketer in the space. But we will be there for the country to sustain security of supply at market price.”
Mallam Kyari statement has generated a lot of debate in the industry with some stakeholders wondering if it was the responsibility of the NNPC’s helmsman to make such a pronouncement without a policy or legal backing.
Speaking during the training, Ronke wondered how the national oil company expect oil marketers to compete with its when it has access to both crude oil in the form of domestic crude allocation (DCA) made for local refineries which it now use as exchange for finished products like petrol as well as direct access to foreign exchange (Forex) while others will go to the open market or wait for the central bank for approval before going to import petrol.
“What would make an independent marketing company take the risk of importing, ie assurance that the government is serious this time and will not go back
“What regulations and road map would make a successful liberalization and eventual deregulation
“There can never be a level playing field for competition and so investors cannot be attracted to the sector. The oil marketers will still need to source for foreign exchange to import products while NNPC have direct access to forex and crude.
“How can such a market work without clear regulations guiding operations,” she quarried.
Similar, the programme coordinator of the Nigeria Natural Resource Charter (NNRC), Ms Tengi George-Ikoli, while reacting to the pronouncement stress the need for law backing it. She faulted the pronouncement coming from the NNPC boss.
“We need the regulators to inform us on what the new policy is. The NNPC GMD only spoke in an interview but we need to hear from the regulators and that is what we
are waiting for,” she stated.
Meanwhile, efforts Leadership to get comment from both the Minister of State for Petroleum Resources and the PPPRA on why they have failed to come out with a clear statement on the issue of petrol subsidy removal proved abortive as the SSA to the minister Garba-deem Mohammad, who promised to reach back on the issue did not until the time of this report. Similarly, the spokeswoman of PPPRA, Folashode Kayode, said she was on vacation, hence couldn’t speak on the issue.